As the owner of a clothing company, you already know that the clothing on the outside of one’s body expresses the core of one’s inner expression, personality and drive. Just as clothing matters to the one who wears it, there are metrics that matter in the examination of your clothing business.
To measure metrics, you’ll first want to review your clothing business plan. If you don’t have one, use this comprehensive clothing business plan template as your guide. The following five metrics will inform your steps to improve and grow your clothing business:
1. Inventory Turnover
Calculating this metric will indicate how quickly inventory items have been sold and require replacement. This metric offers a clear picture of the clothing items that sell through successfully and those that may need to be repositioned or removed from stock. Check this metric regularly to ensure a high rate of inventory turnover.
2. Sales Per Employee
A high-performing employee can quickly take the rate of sales to the highest level, while a low-performing employee may generate only a few sales. You’ll want to note the rate of sales of each employee to encourage each to work toward that highest rate of sales possible.
3. Customer Retention
Customers who return are vital to your clothing business, as each return visit validates your clothing choices and your company. Note the percentage of customers who return, either in-person or online. Apply remedies, such as special incentives or discounts, as needed, to encourage loyal customers.
4. Social Media
The most important metrics can be found in the reach of your customer social media callouts, the number of media mentions your company receives, and the quality of any influencer collaborations. Track purchases based on these metrics and allow your investment decisions to follow the social media metric.
5. Customer Lifetime Value
This metric will measure the total amount of revenue generated by the on-going purchases of a loyal customer. The metric is partially an analysis of past purchases and a forecast of future purchases; however, it positions you to make informed decisions about reaching loyal customers who will generate a high-performance customer lifetime value.
Use each of these five essential metrics to review, measure and assess the strength of your clothing business. The evaluation of consistent results, your clothing business will be positioned for growth and long-term success.